Closing Costs: What To Expect

Closing Costs: What To Expect

Buying a home is the most major purchase that the average person will ever make. When dealing with mortgage decisions and financing a down-payment, it is easy to overlook other costs associated with buying a home. However, closing costs represent some significant expenses, and it is important to have a good idea of what to expect these costs to amount to so that you are not surprised during the final states of buying your house.

So how much do closing costs really, well, cost? It is wise to expect that your final closing costs to amount to roughly 1.5% of the final value of your home, and most experts will recommend you set aside 2%, just in case. This money will go to cover a number of fees, small and large, all associated with the final stages of buying a home. Here are some of the individual fees that go into making up closing costs as a whole.

Inspections and Appraisals

You will have to have the value of your home formally appraised at the time of purchase, a fee that ranges from $100-$250. It is also advisable to have a full home inspection performed to make sure that their are no health and safety issues that have been missed, which typically costs between $300-$400. Finally, you will have to either have the property surveyed, which costs $600-$900, or, in lieu of that, provide your lender with proof of title insurance, which is slightly cheaper at $250 or so.


There are several taxes that go along with the purchase of a new home, including provincial sales tax (which varies province to province), land transfer tax (which also varies based on province), and GST. If you are purchasing a new home, it is possible that the GST has been included in the sales price of the home and will be covered by the builder, but it is crucial that you know who is responsible for this cost ahead of time.


You must present your lender with proof of fire insurance before they will complete the process of financing your home. This cost usually ranges between $250-$600. If you are buying a new home, you may also be responsible for obtaining a new home warranty.

Legal Fees

You will need to deal with a lawyer as you go through the process of purchasing a home, as a lawyer is needed to work on the deed, the mortgage, and the searches. You will also have to cover any expenses the lawyer may have incurred during this process.

Mortgage Fees

There will be a fee associated with applying for your mortgage, usually less than $200.

It is easy to overlook closing fees, being so occupied with other financing issues involved with buying a home, but keeping the small fees in mind and preparing for them wisely can keep them from sneaking up on you. Being prepared means your closing day will be lacking in stress and full of happy excitement!